Leading financial advisers back reforms

Two large financial advisory companies have come out backing key “future of financial advice" reforms as a major industry association continues its campaign to have the reforms toppled.

John Lombard, the new managing director of
WHK
, the nation’s fifth-largest accounting company and financial advisory network, said he welcomed the controversial package.

“We are working in a changing environment and the reforms are driving the need for advisers to increase their skills," he said.

“We are also aware that it is driving vertical integration across the industry. A lot of this is about product platforms, access to cheaper distribution for flogging products."

Accounting generates about two-thirds of WHK’s revenues with the bulk coming from financial advice.

Mr Lombard, whose focus will be on organic growth after about 100 acquisitions during the past eight years, said he backed the government’s proposals to force advisers to contact their clients every two years to renew their mandate for giving advice.

He also backed any moves to increase transparency and remove conflicted advice – an initiative which has been widely supported by advisers and product providers – but said he wanted the government to reconsider its planned reforms of risk cover for superannuation.

“The outlook for providing advice is only limited by imagination," Mr Lombard said.

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Lachlan Partners, a financial advisory network employing nearly 80 advisers, has also backed the government’s program, claiming the reform of advisers’ fees and commissions was overdue.

Lachlan managing director Philip Pezzi said: “We agree with the reforms to provide transparency in pricing services for clients, similar to other professional service groups like accountants and lawyers."

His point of divergence with the government reforms was the potential banning of commissions held inside superannuation.

While Lachlan and WHK support the reforms, Association of Financial Advisers chief executive Richard Klipin still opposes them.

Mr Klipin encouraged his members to step-up their grass-roots opposition by lobbying their local members of parliament, arguing that the reform package would result in fewer financial advisers and less advice.